Banks and non-banking financial companies (NBFCs) in India are looking to the 2026 Union Budget for policy measures that could ease tax burdens, boost credit flows, and streamline compliance norms to support growth and financial inclusion. Industry representatives have outlined several proposals aimed at improving the lending environment and reducing operational constraints faced by lenders.

Key Highlights

• Banks and NBFCs seek tax relief and compliance ease in Budget 2026.
• Lenders want measures to boost credit flow and lower borrowing costs.

A key demand from lenders is for relief on taxes and levies that impact the cost of credit. Banks and NBFCs are seeking rationalisation of tax treatments that could help reduce the overall cost of loans for consumers and businesses. Industry bodies have also called for incentives that would encourage lenders to increase credit flow, especially to sectors that need capital for expansion and infrastructure development.

Financial institutions are also advocating for simplified compliance requirements. They argue that reducing regulatory complexity would lower administrative costs and allow lenders to focus more on expanding credit access, particularly for small and medium enterprises (SMEs) and underserved segments. This includes proposals for revisiting certain reporting norms and procedural hurdles that both banks and NBFCs contend with regularly.

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Another area of focus for the lending industry is strengthening frameworks that support digital lending and risk-based pricing. Banks are urging the government to facilitate an environment that encourages innovation while maintaining consumer protection.

As Budget 2026 approaches, the financial sector’s recommendations reflect a broader push for measures that can stimulate credit demand, reduce credit costs, and enhance the efficiency of financial services in India. Lenders believe that responsive policy actions in these areas can have a multiplier effect on economic growth and financial inclusion.